Will pumped hydro unlock the transition to renewables?

Could Australia’s oldest renewable source of energy be the key to a renewable energy future?

With Snowy 2.0 officially signed off by its board this week, Tasmania’s ‘Battery of the Nation’ making progress and the NSW Government announcing its pumped hydro roadmap, all signs point towards the technology underpinning Australia’s renewable energy transition.

The resurgence of interest in hydroelectricity marks a back to the future moment for Australia’s energy generation.

Since Tasmania’s Waddamana A hydropower plant supplied Australia’s first transmitted electricity in 1916, other states took a different path. In 1921, the first sod was turned at the site of Gippsland’s Loy Yang A brown coal power station, which was sending 75 MW of electricity towards Melbourne. Other mainland states also took advantage of plentiful supplies of coal.

Now, in the search for more low emissions sources of electricity generation, hydroelectricity is making a comeback in a big way.

Unlike hydro plants of the past, the new generation are embracing pumped hydro technology. Using excess renewable energy at periods of low demand, water is pumped uphill to be stored in a reservoir that functions like a ‘natural battery’. When energy demand and prices rise, the water is released to power a turbine to create electricity.

Compared with other storage options available today – like grid scale batteries that are most cost effective for short periods – pumped hydro can produce large amounts of electricity over a long duration. While there are only a few pumped hydro systems operating in Australia today, almost all of energy storage capacity in the USA is supplied by pumped hydro.

And plans are in place to dramatically increase Australia’s pumped hydro capacity as more renewables come online and the need for storage grows.

This week, the board of Snowy Hydro approved the “Snowy 2.0” plan to add 2,000 MW of new renewable pumped hydro capacity to the iconic Snowy Hydro Scheme.

Located between Sydney and Melbourne in the Snowy Mountains, the proposed expansion will bolster the National Electricity Market (NEM) with 175 operating hours of storage.

In a statement released after the meeting, Snowy’s board said that “After almost two years of rigorous due diligence on every aspect of the Project, including detailed financial analysis and ongoing geotechnical drilling, the Board is confident Snowy 2.0 is a strong investment for the Company.”

Snowy 2.0 will now need to be approved by the Federal Government, as the sole shareholder of Snowy Hydro after the Commonwealth bought out NSW and Victoria.

Federal Minister for Energy Angus Taylor has now said the government will now consider Snowy 2.0 on their merits.

For Tasmania, hydroelectricity has never gone away. The technology first revolutionised industry in the 1920s before growing to today supply more than 90 per cent of the state’s electricity requirements. Now work is underway to scope whether the island state could become the ‘battery of the nation’, supplying storage for the NEM as renewables take over from aging coal plants.

ARENA funding is supporting the studies, including the scoping of potential new pumped hydro locations. As part of the project, Hydro Tasmania has found 14 locations for new pumped hydro storage, with a total generation capacity of 4800 MW. The shortlisted locations are being refined further to meet the target of 2500 MW set out in the Battery of the Nation plan.

This week, the Tasmanian Government – with Minister Taylor – put out a white paper with analysis from Hydro Tasmania that outlined how the proposed second interconnector across the Bass Strait would unlock new renewable energy generation.

At present, Tasmania exports electricity to the mainland at Basslink’s capacity.

Hydro Tasmania’s analysis also indicated that 400 MW of “latent dispatchable capacity” in the system could be unlocked with no new investment required, with more interconnection and the right market signals.

More capacity could also be found by upgrading existing hydro assets at Gordon and Tarraleah.

New South Wales is now looking to build on Tasmania’s success, releasing a plan to “supercharge nature’s battery” 24 potential pumped hydro sites shortlisted for development. With 7000 MW of capacity, the NSW Energy Minister Don Harwin said the projects could supply 50 per cent of the state’s peak demand on the hottest summer days.

The Minister said the “roadmap will drive investment to ensure our energy system in NSW is robust and reliable into the future, better for our environment and importantly – cheaper for households and businesses.”

In late October, ARENA announced funding for Origin Energy to scope the feasibility of almost doubling the capacity of its existing Shoalhaven pumped hydro power station in the NSW Southern Highlands which was built back in 1977. If the project proceeds, Origin’s Shoalhaven plant could provide power to 80,000 homes.

Based on the events of the week, it is a safe bet that pumped hydro will play an important role in Australia’s transition to renewables.

Pumped hydro power station aims to double capacity

Nestled in the NSW Southern Highlands 150kms south of Sydney, Origin’s Shoalhaven pumped hydro scheme is a quiet achiever.

One of Australia’s few examples of pumped hydro in operation, the scheme has delivered clean, green electricity since it was commissioned in 1977. Today it plays a key role in managing water security for the people of New South Wales.

As well as moving drinking water across a nearby range, the scheme acts like a giant battery. It can pump water up to the elevated reservoirs when energy demand and prices are low, to be later released to create electricity when demand rises.

Unlike a traditional hydroelectric plant, the scheme can move water between the upper and lower reservoirs on-demand, and reuse water over and over again.

Cascading water through Kangaroo Valley and Bendeela hydroelectric plants, the Shoalhaven scheme today has a capacity of 240MW.

That could be set to grow, with ARENA today announcing $2 million in funding for Origin to assess the feasibility of increasing capacity to 475MW.

That would provide enough energy to power an additional 80,000 homes.

The ARENA funded study will build on pre-feasibility investigations undertaken earlier this year by Origin, which assessed three options to expand the scheme.

The full feasibility study will be based on their preferred option, which bypasses the Kangaroo Valley Power Station and pumps water from Lake Yarrunga to Fitzroy Falls Reservoir.

The project is aided by work to future proof the Shoalhaven scheme when it was originally constructed – meaning dams, pipeline easements and transmission connections are already in place.

STORAGE A KEY PART OF FUTURE ENERGY MIX

Whether delivered by big batteries, solar, hydrogen or other technologies, there is no question that energy storage will be an integral part of the future energy network.

ARENA CEO Darren Miller said Origin’s Shoalhaven pumped hydro power station is leading the way for other pumped hydro developments.

“For more than forty years, Shoalhaven’s pumped hydro scheme has delivered reliable renewable power to the NSW grid,” Darren Miller said.

Compared with other options on the table, pumped hydro makes a strong case. Limited only by the volume of the upper reservoir, pumped hydro can supply more energy for longer than the other available technologies.

“Expanding this scheme would provide more electricity over a shorter period. This would allow Origin to deliver capacity when it needed – when demand is high or renewable output is low,” Mr Miller said.

With solar and wind impacted by cloud cover, low winds, and the daily disruption of nighttime, this supply will be vital to bolster renewables as they do more of the heavy lifting.

Origin’s preferred option for the expansion

“The findings from the Shoalhaven study will help to plan the other hydro energy projects in the pipeline. There is so much potential in this technology, which can be seen in the work underway on Snowy 2.0, Hydro Tasmania’s Battery of the Nation initiatives, Kidston in Queensland, EnergyAustralia’s seawater pumped hydro project in Cultana and the Iron Duchess in South Australia,” he said.

“We know that storage, from both pumped hydro and batteries, will be key to transitioning to renewable energy in Australia,” Mr Miller said.

While the electricity system can cope with a lot more variable renewable energy in the system before storage is needed in significant quantities, pumped hydro is shaping up as an important storage technology – particularly for longer durations.

Origin executive general manager energy supply and operations Greg Jarvis welcomed ARENA’s support for the feasibility study into the proposed project.

“Shoalhaven is in the unique position of having much of the required infrastructure needed for expansion already in place,” Greg Jarvis said.

“This means it can be developed with less community and environmental impacts and in a shorter timeframe compared to developing the same amount of additional capacity as a greenfields project,” he said.

Unlike other storage projects being considered, Shoalhaven has been supplying electricity to the grid for more than 40 years, so it’s potential is well understood.

“This is a strong prospect for future expansion, because Shoalhaven can feed electricity into the grid in as little as three minutes, therefore improving reliability and complementing growing intermittent renewables in the system.

“We will now get on with important assessments and the necessary regulatory approvals that may allow us to double Shoalhaven’s generating capacity in the future,” Mr Jarvis said.

Shoalhaven pumped hydro could double in size

On behalf of the Australian Government, the Australian Renewable Energy Agency (ARENA) has today announced $2 million in funding for Origin Energy to assess the feasibility of expanding the Shoalhaven Pumped Hydro Scheme.

If the $6.8 million full feasibility study is successful, this proposal would nearly double the capacity from the existing 240MW to 475MW.

Located 150 kilometres south of Sydney in the NSW Southern Highlands, the Shoalhaven Pumped Hydro Storage Scheme currently consists of two pumped storage hydropower stations at Kangaroo Valley and Bendeela.

Earlier this year, Origin undertook pre-feasibility work on three potential design options for expanding the scheme.

ARENA’s funding will go towards a full feasibility study based on the preferred option, which involves bypassing the Kangaroo Valley Power Station and instead pumping water from Lake Yarrunga to Fitzroy Falls Reservoir.

The option includes a 235 MW underground power station, taking advantage of the longer water head available, resulting in a higher output and efficiency.

ARENA CEO Darren Miller said the proposed expansion would help provide large-scale storage and would inform other pumped hydro developments.

“For more than forty years, Shoalhaven’s pumped hydro scheme has been delivering reliable renewable power to the NSW grid. When it was built in 1977, Shoalhaven was future proofed to allow for more capacity to be added later on, which should reduce the cost and environmental impact of this project.

“The potential expansion of this scheme would provide more electricity over a shorter period so Origin can deliver capacity when needed – when demand is high or when renewable output is low,” he said.

“The findings of this study at Shoalhaven will help provide key understandings that can be applied to other hydro energy projects ARENA has supported such as Snowy 2.0, Hydro Tasmania’s Battery of the Nation initiatives, Kidston in Queensland, Cultana and the Iron Duchess in South Australia,” he said.

“We know that storage technologies – both pumped hydro and batteries – will be key to the transition to renewable energy in Australia, which is why we’re supporting projects such as this that will help deliver secure and reliable electricity,” Mr Miller said.

Origin executive general manager energy supply and operations Greg Jarvis said, “We welcome ARENA’s support of a feasibility assessment into the expansion of the Shoalhaven pumped hydro scheme.

“Shoalhaven is in the unique position of having much of the required infrastructure needed for expansion already in place. This means it can be developed with less community and environmental impacts and in a shorter timeframe compared to developing the same amount of additional capacity as a greenfields project.

“This is a strong prospect for future expansion, because Shoalhaven can feed electricity into the grid in as little as three minutes, therefore improving reliability and complementing growing intermittent renewables in the system.

“We will now get on with important assessments and the necessary regulatory approvals that may allow us to double Shoalhaven’s generating capacity in the future,” Mr Jarvis said.

A full feasibility study is expected to be completed in 2019.

This announcement does not form a part of WaterNSW’s current Renewable Energy Expression of Interest process.

Tasmanian electricity export plan charges up

Tasmania could export renewable energy to mainland states as part of their plan to become the “Battery of the Nation”, a new report has confirmed.

With support from ARENA, Hydro Tasmania has been developing a blueprint for the role the state can play in Australia’s electricity market as renewable energy makes up a greater share of our energy supply.

The project’s latest findings were released last week, confirming it is viable for Tasmanian generators to become bigger players in the National Electricity Market over the next two decades.

Hydroelectricity has supplied the majority of Tasmania’s electricity since the first public plant opened on the Great Lake more than 100 years ago.

Today, more than 90 per cent of the state’s electricity is supplied by the network of hydroelectric power stations, with wind and small-scale solar filling any shortfalls.

While hydro has provided baseline energy to the state for a century, mainland states have been fuelled primarily by coal-fired power plants.

It’s great news that renewables are growing at a record rate, but the growth in variable sources of energy like wind and solar is bringing new challenges for electricity markets that have historically been supplied by baseload coal generators.

Wind and solar are the cheapest new sources of electricity, but their inherent variability means more storage will be needed to deliver a stable and balanced supply of energy.

The new research found that additional interconnection capacity would unlock Tasmania’s potential to export renewable energy to mainland states.

Boosting interconnection would pave the way for Tasmania to unlock its significant wind resources, diversifying the NEM by generating electricity at different times to mainland wind farms.

ARENA has made $2.5 million available to scope the “Battery of the Nation” project, with $500,000 allocated to assessing the potential role of Tasmanian renewable energy in the future Australian Energy Market.

ARENA CEO Ivor Frischknecht at Cethana Power Station with Energy Minister Josh Frydenberg and Tasmanian Premier Will Hodgman

ARENA CEO Ivor Frischknecht said “Tasmania’s vast pumped hydro and renewable energy reserves place it in a great position to increase capacity to the NEM.”

“As renewable energy grows to comprise a larger percentage of the nation’s electricity the importance of storage for reliability also increases. The Battery of the Nation has the potential to provide for the future needs of the NEM,” he said.

“A new connection between the island state and the mainland could help to harness the power of Tasmania’s wind, and the considerable potential for new pumped hydro energy storage,” Mr Frischknecht said.

“Two things are now official: Battery of the Nation stacks up very well; and Tasmania can deliver on the opportunity.”

“Of course, we need more interconnection to succeed. Even with that interconnection cost, the Future State NEM analysis confirms Battery of the Nation is a front-runner that’s extremely competitive and cost-effective,” he said.

Future State NEM analysis finds Tasmania could become the Battery of the Nation

Tasmania has strengthened its case to become the Battery of the Nation as a new study released today by Hydro Tasmania confirms the state can play a significant role in the transformation of the National Electricity Market (NEM) over the next two decades.

On behalf of the Australian Government, the Australian Renewable Energy Agency (ARENA) provided Hydro Tasmania $500,000 in funding to develop a blueprint of the role Tasmania could play in the context of the future NEM. The study was completed as part of the $2.5 million in funding made available for the Battery of the Nation Project.

The Future State NEM analysis explored how the Tasmanian hydro system can support further on-island renewables development, such as wind, through augmentation of existing hydro-electric power plants, pumped hydro energy storage development and further interconnection with the broader NEM. The analysis concludes Tasmania has potential to expand its role in the NEM and found the Battery of the Nation is a viable and cost-effective option for supporting Australia’s future energy needs.

The study also identified that along with Tasmania’s cost competitive pumped hydro, Tasmania has a diverse wind resource which would generate electricity at different times from the mainland wind resources. The Battery of the Nation hydro projects and a second interconnector could unlock greater wind generation.

ARENA and Hydro Tasmania also recently announced 14 ‘high potential’ sites for pumped hydro plants around existing reservoirs, representing a combined potential capacity of up to 4800 MW. Overall the estimated capital cost across the potential projects is in the region of $1.1-$2.3 million per MW, with most opportunities less than $1.5 million per MW.

ARENA CEO Ivor Frischknecht said “Tasmania’s vast pumped hydro and renewable energy reserves place it in a great position to increase capacity to the NEM.”

“As renewable energy grows to comprise a larger percentage of the nation’s electricity the importance of storage for reliability also increases. The Battery of the Nation has the potential to provide for the future needs of the NEM,” he said.

“A new connection between the island state and the mainland could help to harness the power of Tasmania’s wind, and the considerable potential for new pumped hydro energy storage.” Mr Frischknecht said.

“Two things are now official: Battery of the Nation stacks up very well; and Tasmania can deliver on the opportunity.”

“Of course, we need more interconnection to succeed. Even with that interconnection cost, the Future State NEM analysis confirms Battery of the Nation is a front-runner that’s extremely competitive and cost-effective,” he said.

ARENA has also committed $10 million in funding to support TasNetworks in preparing a technical and commercial feasibility study for a second interconnector from Tasmania.

About the Battery of the Nation

The Battery of the Nation initiative is setting up a blueprint for how Tasmania’s renewable resources are developed over the coming decades. With the support of ARENA, the initiative is advancing studies into projects that if realised, would lock in full energy security for Tasmania, help give Tasmanians access to the lowest possible power prices and deliver reliable, affordable renewable energy. By boosting the hydropower system with pumped hydro, with increased wind generation and more interconnection, Tasmania could also significantly grow its contribution to a future National Electricity Market (NEM).

ARENA has committed $2.5 million in funding for initial pre-feasibility studies to redevelop existing hydro-electric power stations at Tarraleah and Gordon, to identify and scope high potential Pumped Hydroelectric Energy Storage (PHES) sites and to explore the potential of Tasmania to play an expanded role in the NEM.

The scoping of new pumped hydro locations is the second phase of investigations as part of Tasmania’s plan to become the ‘Battery of the Nation’.

Last year, ARENA provided $2.5 million in funding to Hydro Tasmania to investigate whether it would be feasible to expand or augment two existing hydro power stations at Tarraleah and Gordon and build new pumped hydro plants to double the state’s electricity generation. The funding also sought to examine whether Tasmania could play an expanded role as an exporter of electricity to the mainland National Electricity Market.

Initial results are now in and today federal Minister Josh Frydenberg and the Tasmanian Government announced that 14 suitable locations have been found with an estimated total potential capacity of 4800MW and 140,000MWh of storage.

ARENA CEO Ivor Frischknecht speaking at Lake Cethana

The shortlisted locations are clustered around eight existing reservoirs in the central highlands, north and west coasts. These preferred 14 sites will now be refined further to find the best locations to achieve the project’s 2500MW target.

Hydro-electric power stations have powered Tasmania for 100 years, currently supplying more than 80 per cent of the state’s electricity requirements.

Separate to the Battery of the Nation, ARENA has also committed $10 million in funding towards a business case for a second interconnector which is being developed, and jointly funded, by Tasmania’s energy network TasNetwork.

What is pumped hydro?

Pumped hydro functions much like traditional hydro electricity, but reuses water over and over again.

It works by pumping water to higher reservoirs when energy is in low demand and cheap, or there is an excess of solar or wind power. Water is released to power a turbine when demand peaks or renewable generators aren’t making electricity.

Big role for hydro as renewables come online

Storage is unlocking the potential of low cost generators, reducing fluctuations in supply by banking the power of the sun and wind.

This is growing demand for grid-scale storage as more renewables come online, given pumped hydro can store energy for longer than any other available technology.

Hydro Tasmania’s early modelling shows the Battery of the Nation project could deliver $5 billion of investment and up to 3,000 jobs over the next 10 to 15 years.

ARENA CEO Ivor Frischknecht said the initial concept study for new pumped hydro reinforces Tasmania’s potential to provide large-scale storage for the mainland.

“Tasmania has been identified as the Battery of the Nation for a reason, as it has some of the best wind resources and existing hydro-electric power,” Mr Frischknecht said.

The capital cost of the potential projects is estimated to be between $1.1 – $2.3 million per MW, but most sites will come in below $1.5 million per megawatt.

Pumped hydro could generate 4800 MW of potential capacity across 14 sites in Tasmania, according to a study released today by Hydro Tasmania.

On behalf of the Australian Government, the Australian Renewable Energy Agency (ARENA) provided $300,000 for Hydro Tasmania’s project which assessed around 2,000 potential sites for pumped hydro across Tasmania.

Out of an original shortlist of 30, Hydro Tasmania have now highlighted 14 ‘high potential’ sites for pumped hydro plants around eight existing reservoirs across Tasmania’s central highlands, north and west coast.

These sites represent a combined capacity of up to 4800 MW, which are expected to be refined down in the next phase to around 2500 MW of high potential sites. Overall the estimated capital cost across the potential projects is in the region of $1.1 – $2.3 million per MW.

In total, ARENA has committed up to $2.5 million for Hydro Tasmania’s ‘Battery of the Nation’ initiative which would double Tasmania’s existing flexible generation capacity. The Battery of the Nation is a bundle of proposed projects that include redeveloping existing hydro-electric power stations, building new pumped hydro plants and expanding the role of Tasmania in the NEM using new wind power and hydro power.

ARENA CEO Ivor Frischknecht said the initial concept study for new pumped hydro reinforces Tasmania’s potential to provide large-scale storage for the mainland.

“As Australia’s renewable energy make-up continues to grow, energy storage will be increasingly necessary, which is why this project is so important”

“Tasmania has been identified as the Battery of the Nation for a reason, as it has some of the best wind resources and existing hydro-electric power,” Mr Frischknecht said.

“Unlocking most of these opportunities requires additional interconnection, which is why ARENA is also working with TasNetworks to assess the feasibility of a second interconnector,” he said.

Hydro Tasmania CEO Steve Davy said the work confirms there’s comfortably more than 2,500 MW of reliable and cost-effective pumped hydro potential in Tasmania.

“Battery of the Nation is about locking in our island’s energy security and giving Tasmanians the lowest possible power prices. It offers a future that’s clean, reliable and affordable,” Mr Davy said.

“Doubling Tasmania’s clean energy would also create a surplus, beyond our own needs, to support mainland Australia. That’s crucial to replace the coal power that’s being phased out.”

ARENA has provided more than $21 million in funding for feasibility studies into pumped hydro projects across Australia, including for Snowy 2.0, Cultana and Middleback Ranges in South Australia and Kidston in Queensland. Flexible capacity, including storage, is a critical component of enabling more wind and solar power in Australia’s energy system.

About the Battery of the Nation
The Battery of the Nation initiative is setting up a blueprint for how Tasmania’s renewable resources are developed over the coming decades. With the support of ARENA, the initiative is advancing studies into projects that if realised, would lock in full energy security for Tasmania, help give Tasmanians access to the lowest possible power prices and deliver reliable, affordable renewable energy. By boosting the hydropower system with pumped hydro, with increased wind generation and more interconnection, Tasmania could also significantly grow its contribution to a future National Electricity Market (NEM).

ARENA has committed $2.5 million in funding for initial pre-feasibility studies to redevelop existing hydro-electric power stations at Tarraleah and Gordon, to identify and scope high potential Pumped Hydroelectric Energy Storage (PHES) sites and to explore the potential of Tasmania to play an expanded role in the NEM. ARENA has also committed $10 million to funding a business case for a second interconnector.